The magistrate has further directed the joint commissioner of police, Mumbai, to appoint any other investigating officer to further probe the case.

Tata Finance, on August 6, 2001, had filed a complaint against its former managing director Dilip Pendse through a first information report accusing Pendse and others of criminal breach of trust, forgery, falsification of accounts, criminal conspiracy and cheating.

Mahesh Jethmalani, counsel for Tata Finance, in a press briefing in Mumbai on Friday, said, "The magistrate has found several lacunae in the findings of the investigating officers of EOW. The statements of directors were not even recorded by the police."

Jethmalani added, "Investigations by the Mumbai police leave much to be desired."

Pendse is at present in Tihar jail under judicial custody after being arrested by the Delhi police on February 25, 2003 for fund misappropriation of Rs 2 crore (Rs 20 million). The complaint was filed by Inshaallah Investments, an erstwhile subsidiary of Tata Finance.